Means testing is not the solution in the face of Scotland’s ageing population

Age Scotland’s Campaigns and Communications Manager, Lindsay Scott, discusses the flaws in means testing for older people in Scotland. 

Older people chatting

The recent suggestion in the Scotsman by Robert Wright, professor of economics at the University of Strathclyde, that means testing be introduced to ease the increasing costs of universal services such as free personal care and concessionary transport for older people has one major flaw.

Means testing is generally based on a person’s income, though sometimes it also includes tests of assets and/or capital. And although means testing can concentrate resources on those most in need and to some extent redistribute those vertically from rich to poor, numerous cost-benefit analyses have revealed that its advantages are often outweighed by its disadvantages.

These disadvantages are: it is usually complex and problematic to administer, and often fails to help those most in need.

The reasons commonly given for low take-up are the fear of penalty for error; the unpleasantness of the claim process; a lack of information giving rise to information search costs; an unwillingness to divulge personal financial circumstances,  the perceived loss of self-respect; social stigmatisation, the effect of changing circumstances and the less than satisfactory history of means-testing to date.

Furthermore, because people’s income can change rapidly (interest on savings plummeting for example), effective means-testing involves constant reporting and frequent adjustment of the levels.

Because this is time-consuming, a large bureaucracy is usually required and as a result, the costs of administering the means-testing procedure can end up negating any potential benefits to the public purse.

There are a number of options that can be explored to ensure the sustainability of these valuable, and greatly appreciated policies – means testing should be the option of last resort.

What do you think of Robert Wright’s suggestion? Read the full Scotsman article here.

2 thoughts on “Means testing is not the solution in the face of Scotland’s ageing population

  1. He spoke about bus passes for the elderly, and, recently, I emailed Audit Scotland that old people were not the real culprits in the free bus pass, it was people who are being PAID MOBILITY allowance. Mobility allowance was introduced to help pay for transport costs, and now has become part of these persons earnings

    • Pat, thanks for the response. Mobility Allowance is a difficult one in that it was introduced to enable people who are “unable to walk or virtually unable to do so” to get out and about the same as the rest of us do. I don’t think any older person with a bus pass would begrudge someone unable to walk the allowance, although being “virtually unable to do so” is certainly open to interpretation.

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